The additions will give the company more than 500 stores in
the Greater China region next year, after a similar expansion in
2010, Managing Director Sunny Wong Yat Ming said in Hong Kong.
Locations will include Inner Mongolia, China’s largest coal
supplier, and the eastern province of Zhejiang, he said.

“The biggest spenders in China are young and don’t care
about discounts,” Wong said in an interview. “They love
European brands.”

Trinity, also the retailer of Cerruti 1881 suits and
Salvatore Ferragamo products in Korea, forecasts second-half
sales will rise 15 percent as China’s economic growth spurs
demand for coal and other commodities. Coal mining helped Inner
Mongolia’s per-capita urban household disposable income rise 10
percent to 8,814 yuan ($1,300) in the first six months,
narrowing the gap with major Chinese cities.

Big Spenders

Trinity, the luxury menswear division of Li & Fung Group,
fell 1.2 percent to HK$6.82 at the 4 p.m. trading close in Hong
Kong, compared with a 0.4 percent gain for the benchmark Hang
Seng Index. The stock has surged fourfold from its initial
public offering price of HK$1.65 in November.

The company sells Salvatore Ferragamo products in South
Korea, Singapore, Malaysia and Thailand through joint ventures.
It holds the rights for Gieves & Hawkes and Cerruti 1881 in
China.

In a country where fake goods are rampant, the big spenders,
typically between the ages of 30 and 40, head to Trinity’s
outlets for authentic products and good service, Wong said Sept.
3. They also “sit, relax and chat” on the in-store sofas and
ask about products. “This is what we call increasing
sophistication,” the executive said.

The clothier plans to acquire brands and is in talks with
European labels that want to use Trinity as a platform in
mainland China, Wong said, without identifying them. Mainland
China excludes Hong Kong, Macau and Taiwan.

Zhejiang Income

The new stores will include 17 in Inner Mongolian cities
such as Baotou and Ordos, each with a population smaller than 2
million. Trinity already has three outlets in the provincial
capital, Hohhot, Wong said.

It also plans to expand in Zhejiang’s Zhoushan, a city with
fewer than 1 million people that counts shipbuilding and marine-product processing among its main industries. Wong didn’t
specify the number of stores there.

Zhejiang urban households’ per-capita disposable income
rose 12 percent to 14,919 yuan in the first half, overtaking
Beijing to be placed second after Shanghai, government data
showed. China replaced the U.S. last year as the world’s largest
auto market.

Trinity was founded in 1969 as a clothes maker and exporter
in Hong Kong and began licensing brands in the 1970s, according
to its website. It expanded in the next two decades in luxury
menswear and has stores in at least 50 cities in China, Hong
Kong, Macau and Taiwan.

Luxury Goods

“In China, sales of luxury goods have never declined, even
during the 2008 financial crisis,” Wong said. Economic growth
in smaller cities is more than 10 percent, faster than the
national average, he said.

As of June 30, almost 70 percent of Trinity’s stores were
outside China’s so-called first-tier cities, which include
Beijing and Shanghai, according to a company financial statement.
First-half sales climbed 20 percent from a year earlier to
HK$925 million.

Trinity also designs, makes and sells D’urban and Kent &
Curwen menswear in China. While the brand heads are from Italy,
England and Japan, the local teams comprise designers from Hong
Kong who are better attuned to specific needs of Chinese
customers, Wong said.

“We have more folds in our pants to accommodate pot
bellies and make shorter sleeves as Chinese arms are shorter
than Europeans’,” he said.

Closely held Li & Fung Group is owned by the billionaire
Fung family. Its affiliates include Toys “R” Us Asia and Li &
Fung Ltd., the biggest supplier to retailers such as Wal-Mart
Stores Inc.